Creditors Voluntary Liquidation - CVLUnfortunately there are times when a company has 'had its day' and it is time to shut up shop. Although this may seem
extreme, acting sooner and applying for a Creditors Voluntary Liquidation or CVL now rather than later is more likely to not only protect the position of creditors as well as employees,
but also the position of the directors [see Director's Services] Such action
could prevent:

trade creditors suffering greater losses than necessary;

the bank situation worsening and possibly the directors having to paying monies owed under their personal guarantees;
and

employees not being paid for long periods of time;

A Creditors Voluntary Liquidation is usually the last voluntary resort for a company, as it is insolvent and cannot continue trading and is the
most common form of liquidation in the UK.
With the assistance of an Insolvency Practitioner, directors would convene meetings of the company's members and creditors
in order to place the company into creditors voluntary liquidation and appoint a Liquidator.
If the company has not already done so, it would cease to trade.
All property and assets of the company including any book debts would be realised and the proceeds of these would fund the
cost of the CVL and any excess funds would be available as a dividend to creditors in the order of priority laid
down by the insolvency legislation.
If the company has insufficient assets to cover the associated costs of the creditors voluntary liquidation the directors would have to
personally meet such costs. The level of these costs would be agreed between both parties prior to any steps being taken
to place the company into a CVL.
At the meetings of members and creditors, a report would be presented detailing the history of the company, its financial
circumstances and why it is being placed into a creditors voluntary liquidation. Members and creditors would be given the opportunity to ask the
directors questions at their respective meetings. The members' meeting would pass a special resolution placing the
company in liquidation and an ordinary resolution appointing a Liquidator. At the following creditors' meeting a vote
would take place to either confirm the members' appointment of a Liquidator or to appoint another insolvency practitioner
as Liquidator in his place.
For our Cost-Effective Solutions for a Solvent Companies/LLPs, see our Liquidation Direct services by clicking on the following
links:
For solvent companies, click MVL Direct
For insolvent companies, click CVL Direct